| Cruise lines suffer from Costa fallout

As the salvage of Costa
Concordia commences, the
cruise industry hopes it can also
salvage its sunken reputation.
WHILE it is too soon to know the effect of
last week’s accident on consumer confidence
and cruise sales, the London and New York
stock markets sent an immediate signal.
Carnival Corporation as well as Royal
Caribbean shares have both taken a big hit,
with analysts cutting their ratings on the two
companies.
JP Morgan analysts cited the impact of the
“headline catching event… on an already soft
consumer environment”, particularly in
Europe, and the price discounting expected to
follow.
Carnival Corp this week released a statement
about the financial impact of the ship’s
grounding and announced that Costa
Concordia would be out of service for at least
the rest of its current fiscal year.
“For the fiscal year ending November 30, the
impact to 2012 earnings for loss of use is
expected to be approximately US$85-$95
million or $0.11-$0.12 per share,” Micky
Arison, Carnival Corp chairman and CEO, said.
“In addition, the company anticipates other
costs to the business that are not possible to
determine at this time.”
Meanwhile, the International Cruise Council
Australasia (ICCA) in conjunction with the
Cruise Lines International Association (CLIA),
the European Cruise Council (ECC), and the
Passenger Shipping Association (PSA), continue
to closely monitor the situation.
“First and foremost, we extend our deepest
sympathies to the passengers and crew who
were on board and especially to the families of
passengers and crew who lost loved ones,”
said Brett Jardine, the general manager of the
ICCA.
“On behalf of all cruise line members, we
would also like to pay tribute to all those who
worked tirelessly to evacuate the ship to help
minimise casualties.”
Jardine said agents should reassure clients
that ICCA member lines are subject to the
world’s highest safety standards according to
international maritime requirements.
“Accidents such as this one are an extremely
rare occurrence in the cruise industry, and
cruising continues to be one of the safest
means of travel in the holiday market,” he said.
“The ICCA believes consumers and travel
agents should continue to have confidence in
the cruise industry both locally and overseas,
based on its strong track record.”